Exam 3: Theories of Development Economics

The "commons problem" posited that groups of people find it difficult to self-organize to pursue a collective good because it is in each individual's self-interest to free-ride, which results in the undersupply of public goods.

Define import substitution industrialization (ISI) and explain why it was unsuccessful in many Latin American countries.

The initial group of Asian economies that did extremely well in the 1970s and 1980s were _________________.

In development, linkages can be both forward (output producing) and backward (input producing).

The policy goals of Western industrialized nations during the Cold War were largely to spread Western-style economic development and strengthen economic and political linkages within the capitalist bloc.

What were the consequences of the move to neo-liberal thinking and economic policy for the Global South?

The word "declining" when used as part of the term "declining terms of trade" implies that the prices of commodity exports fall over time in comparison to the prices of manufactured imports.

International trade prior to the Industrial Revolution consisted mostly of trade in niche products like _____________.

Who of the following was NOT considered leading thinkers on political economy following the Industrial Revolution?

American sociologist Talcott Parsons argued that non-Western societies could become industrialized even if their values and identities remained traditional and "pre-modern."

As incomes rise, people allocate a growing share of their money to buying manufactured goods and services, the value of which depends on the knowledge or technology applied to them. This is known as _____________________.

Describe Deepak Lal's argument around the mistake economists in the Global North made concerning the economies of the Global South.

Define and describe Anne Krueger's concept of "rent-seeking."

Neo-liberalism is a new form of government that replaced communism.

Modernization theorists such as Talcott Parsons believed certain non-Western countries needed Western guidance in developing from "traditional" societies because ___________.

Daron Acemoglu and James Robinson argued that the political institutions of a society influenced whether its economic institutions were "inclusive" or "exclusive."

Import substitution industrialization (ISI) required trade protection of new "infant industries" by using tariffs or taxes on cheaper or higher-quality imported manufactures, access to easy financing, and copying foreign technologies.

As a result of Keynesian economics and the aftermath of World War II, many people believed that markets could in fact be suspended or drastically curtailed by government actions for the common good.

Dani Rodrik argued that institutions were important for economic development and could be simply copied from Western examples.

Paul Rosenstein-Rodan argued for "big push" projects in development. This meant that: